Spain’s Jobless Claims Extend Climb

Spanish jobless claims continued to spiral higher in October as one of Europe’s worst recessions ground on. Spanish jobless claims rose by 98,906, or 2.7%, to 3.8 million in October from September, the labor ministry said Tuesday in a statement. October jobless claims were up 35% on the year.

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Protesting climate change, not job losses, in Barcelona

The new jobless numbers come as the European Commission projected Tuesday that the Spanish economy won’t return to growth until 2011 and the government’s budget deficit will likely reach double digits this year and next.

In its autumn economic forecasts, the commission reiterated its forecast that Spanish gross domestic product will fall by 3.7% this year but revised its forecast for next year to a 0.8% fall from a 1% drop previously. The commission said it forecasts Spanish GDP to rise 1% in 2011.

The commission forecast Spain’s budget deficit hitting 11.2% of GDP in 2009, up from its previous forecast of 8.6%, and said it expects the budget deficit will be 10.1% of GDP in 2010, up from its previous forecast of 9.8% of GDP.

“For unemployment to continue rising is in line with forecasts,” Deputy Labor Minister Maravillas Rojo said in a statement, adding that Spain should benefit from signs other countries are emerging from the global economic recession. “A recovery can start that should help stop job destruction [in Spain],” Rojo said.

According to recent data from European Union statistics agency Eurostat, Spain had a 19.3%unemployment rate in September, more than twice the 9.2% rate for the EU as a whole.

The global financial crisis precipitated the collapse of Spain’s once-buoyant housing market last year and pitched the wider economy into recession. Most economists expect Spain to be one of the last European countries to return to growth.

The Spanish government rushed out an 8 billion euro infrastructure plan it says has created over 400,000 new jobs since April. But that plan is now winding down and the government says it is focusing on policies that encourage a rebalancing of the economy away from its reliance on the construction industry.

In the meantime, the government is expanding protection for the unemployed, Salgado said. The government recently created a new benefit for the long-term unemployed.

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